South Korean banks' foreign borrowing growth slowed last month as local lenders borrowed less loans from overseas amid easing external uncertainties, the financial watchdog said Wednesday.

The rollover rate of long-term external debts with a maturity of one year or more at 12 domestic banks, excluding regional banks, reached 113.4 percent in March, according to the Financial Supervisory Service (FSS).

The rollover rate gauges the percentage of fresh borrowing from overseas against foreign debts that mature in more than one year. The rate above 100 percent means local lenders refinanced their maturing debts rather than repaying them.

The March figure was lower compared with 267.6 percent in February and 382.2 percent in January. Domestic banks continued to reduce their foreign borrowing this year as they secured foreign liquidity earlier in preparation for the potential external uncertainties.

Market concerns over the European debt crisis eased after Greece agreed on debt swap deals, the FSS said, adding that foreign currency funding conditions for local lenders showed stable picture recently.

Meanwhile, the refinancing rate of short-term foreign debts that mature in one year or less at 16 local banks, came in at 94 percent in march, up from 65.1 percent a month earlier, according to the FSS.

The rollover rate of short-term debts was up last month, but local banks continued to repay short-term debts with funds secured through long-term borrowing.

Conditions for foreign borrowing were enhanced last month amid easing worries about the European sovereign debt crisis. The spread on credit default swaps (CDS) for the South Korea's dollar- denominated sovereign debts that mature in five years came in at 123 basis points (bps) as of the end of March, down 13 bps from the previous month.

Weighted average spread on local banks' foreign borrowing with a maturity of less than one year rose 6.5 bps on-month to 15. 3 bps in March, with the spread on foreign debts that mature in one year advancing 12 bps to 137 bps. But the figure for five-year foreign debts sank 56 bps to 190 bps over the cited period.

Local banks' foreign currency soundness numbers exceeded their recommended levels. The 3-month foreign currency liquidity ratio, a barometer of banks' foreign liquidity health, stood at 108.8 percent as of end-March, breaching the recommended level of 85 percent.

The ratio is calculated by dividing liquid foreign assets that mature within three months by liquid foreign liabilities with a maturity of less than three months.

Both 7-day and 1-month mismatch ratios stayed above the recommended level of minus 3 percent and minus 10 percent in March. The ratios stood at 2.0 percent and 1.8 percent each last month.